The U.S. dollar held near 14-year peaks on Wednesday as global yield spreads shifted inexorably in its favour, while early weakness in the yen saw Japanese shares touch a one-year top.
Profit-taking set in as a slow pre-Christmas session dragged on and the Nikkei eased 0.2 percent .N225 in late trade. Spread betters pointed to a small opening loss for European exchanges after shares there hit an 11-month high on Tuesday.
Australia's main index finished at its best level in 17 months after Wall Street racked up more records.
The dollar has been revelling in its rapidly widening yield premium, with the Federal Reserve set on a tightening course even as its peers in Europe and Japan act to keep their short-term rates deep in negative territory.
"It is now clear that the U.S. dollar does have more yield fuel and we would not try to pick even an interim high," said Sean Callow, a senior forex analyst at Westpac.
"Dollar strength should keep pressure on G10 and Asian FX into the new year."
The dollar index, which measures it against a basket of currencies, stood at 103.110 having reached 103.65 .DXY, its highest since December 2002.
The U.S. currency eased a touch on the yen to 117.64 JPY=, but remained in easy reach of the recent peak at 118.66. The euro was a fraction firmer at $1.0409.
On Wall Street, the Dow had ended Tuesday just 25 points shy of the magical 20,000 barrier helped by a 1.68 percent gain in Goldman Sachs (GS.N).
Stocks have been on a tear since the Nov. 8 presidential election, with the Dow up 9 percent and the S&P 500 6 percent on bets that President-elect Donald Trump's plans for deregulation and infrastructure spending might boost profits and growth.
The Dow .DJI rose 0.46 percent on Tuesday, while the S&P 500 .SPX gained 0.36 percent and the Nasdaq .IXIC 0.49 percent. Eight of the 11 major S&P sectors rose, led by a 1.23 percent jump in the financial index .SPSY.
After the bell, Nike rose 3 percent on a strong quarterly report from the sports apparel seller.
Emerging markets have not been nearly as thrilled by Trump's win, as the threat of tariffs has stirred fears of a trade war while rising U.S. yields have attracted funds away.
Benchmark 10-year U.S yields have climbed almost 80 basis points since early November to reach 2.57 percent.
Data from the Institute for International Finance showed non-resident investors had pulled $23 billion from emerging market portfolios since early October.
Chinese markets have also been unsettled by Beijing's move to heighten supervision of shadow banking activities and on talk it may tighten liquidity to crimp the outflow of capital.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched up 0.3 percent on Wednesday, but that followed a string of losses.
In commodity markets, oil prices crept higher for a fourth session on expectations data due later in the day would show a U.S. crude inventory draw.
U.S. crude futures CLc1 were up 19 cents at $53.49 a barrel, while benchmark Brent crude futures added 15 cents to $55.50.
Gold held at $1,135.40 an ounce as a firm U.S. dollar kept it near last week's 10-1/2-month low of $1,122.35.
Reference: Wayne Cole